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Oil self-sufficiency under threat

Threats to Australia's high level of self-sufficiency in oil...

Threats to Australia's high level of self-sufficiency in oil is set to emerge as the key theme at the oil industry's annual conference in Hobart this week.

The conference, hosted by the Australian Petroleum Production and Exploration Association, should be upbeat given the industry's record profitability because of continuing high oil prices and the weak dollar.

But looking to the future, the industry can be relied on to use the three-day conference to campaign for a better deal and more encouragement from Canberra.

At the conference, expected to be attended by more than 1,000 delegates, the industry will argue for wholesale reform of the planning and approval process covering exploration and production, as well as a more supportive fiscal regime.

It will argue that without change, Australia's annual $25 billion reliance on the industry in the form of taxation, export income and 80 per cent-plus oil self-sufficiency is threatened.

Speaking on the eve of the conference, the executive director of APPEA, Mr Barry Jones, said that "Australians and our political leaders needed to be reminded how dependent we are on fossil fuels.

"Many have forgotten the links between the petrol in their car and oil production in Gippsland (Bass Strait) or the gas flame on their kitchen stove and Moomba (South Australia). It took massive exploration efforts to discover that oil and gas and further exploration is needed now to find the oil and gas for Australians to use in the next
decade," Mr Jones said.

Forecasting groups predict that local oil production could plummet from the current rate of 600,000 barrels-a-day to as low as 130,000 by 2010.

Mr Jones said that despite those forecasts, Canberra "still fails to provide the encouragement to petroleum exploration that would flow from streamlining the approval process, reforming the unattractive fiscal regime and ensuring the required funding to determine the extent of Australia's petroleum reserves.